Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Monday’s bond market has opened in positive territory despite minor gains in stocks. The stock markets are showing optimism ahead of this week’s earning announcements with the Dow up 14 points and the Nasdaq up 2 points. The bond market is currently up 8/32, which should improve this morning’s Massachusetts mortgage rates by approximately .250 – .375 of a discount point.
This week brings us the release of seven relevant economic reports for the bond market to digest, but none are scheduled for release today. It also is the beginning of quarterly earnings season, which could lead to fluctuations in the stock markets. If earnings come in lighter than estimates, the stock markets may fall, leading to an influx of funds into bonds. But, if earnings and forecasts are strong, the major stock indexes may rally, pulling funds from bonds and leading to higher Massachusetts mortgage rates.
The first report of the week comes early tomorrow morning but it is the least important of the seven. February’s Goods and Service Trade Balance will be posted tomorrow. This data gives us the size of the U.S. trade deficit, but unless it varies greatly from forecasts, it likely will not cause much movement in Massachusetts mortgage rates. Current forecasts show a $39.0 billion trade deficit.
The first important report will be released early Wednesday morning when the Commerce Department will release March’s Retail Sales data. This piece of data gives us a measurement of consumer spending, which is very important because consumer spending makes up two-thirds of the U.S. economy. Forecasts are calling for a 1.1% increase in sales last month. If we see a larger increase in spending, the bond market will probably fall and Massachusetts mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower Wednesday.
Also scheduled for release Wednesday is March’s Consumer Price Index (CPI). This index is one of the most important pieces of data we see each month. It measures inflationary pressures at the consumer level of the economy. If inflation is rapidly rising, bonds become less appealing to investors because it erodes the value of their future fixed interest payments. This leads to bond selling and higher Massachusetts mortgage rates. There are two readings in the index that traders watch. The first is the overall reading while the second is the more important core data reading that excludes more volatile food and energy prices. Analysts are expecting to see a 0.1% increase in both readings. If we see larger increases, we could get higher Massachusetts mortgage rates Wednesday.
Overall, look for the most movement in rates the middle part of the week. The Retail Sales and CPI reports are the biggest names on the agenda. Either of them can cause significant movement in the markets and mortgage rates, so the fact that they are being posted on the same day makes Wednesday the most important of the week. Look for the stock markets to influence bond trading and Massachusetts mortgage rates the first part of the week, but we can expect to see the most movement in rates the latter part. I am expecting it to be an active week for the mortgage market, so please maintain contact with your mortgage professional if still floating an interest rate.
If I were considering purchasing or refinancing a home and predicting likely Massachusetts mortgage rates, Iw ould…
Lock if my closing was taking place within 7 days…
Lock if my closing was taking place between 8 and 20 days…
Float if my closing was taking place between 21 and 60 days…
Float if my closing was taking place over 60 days from now.
This is only a general opinion of what I would do if I were considering whether to lock or float a Massachusetts mortgage based on the current mortgage market. Your individual situation may be different. Contact me if you would like advice for your particular circumstances.
Copyright : Mortgage Commentary
Geof McLaughlin, better known as The Massachusetts Mortgage Broker, is a nationally acclaimed mortgage professional committed to educating and empowering consumers about all things mortgage through his popular Massachusetts Mortgage Broker blog.
Geof is a top loan originator for one of the country’s leading mortgage companies, Mortgage Master Inc, with a proven reputation of offering its clients the best Massachusetts mortgage rates and lowest closing costs. He can be reached directly at 508.656.0055 or at geof@MAMortgageBroker.com.
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